Parliamentary Buildings (Restoration and Renewal) Bill

Debate between Baroness Smith of Basildon and Lord Stunell

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 22nd July 2019 Lords Chamber

[Lord Stunell]

My Lords, debates today have probably added £1 billion to the total cost of R&R. When we look at we have said about disability, constitutional changes, public engagement and future-proofing, I think that we can forget £4 billion and start to look at £5 billion. All that is in square brackets anyway.

This legislation is not a money Bill; if it were, we would not be discussing it. It is a governance Bill, but how we arrange the governance affects how much money is spent. For example, the opaque governance of the process leading up to this Bill reaching your Lordships’ House has already cost us money, because it could perfectly well have come at least a year and probably 18 months sooner, which would have saved money. If it is hard to see how, perhaps I may say that the index of consumer price inflation in the last year was 1.9% and the index of construction price inflation was 2.8%—more or less 1% greater. That 1% leads to the whole project’s expenditure falling one year later than it would have done, which has cost us £40 million on a £4 billion project—probably £50 million—simply by starting a year later than we needed to. That is before we have a plan or a project on the table. My amendment is intended to enable us to avoid unnecessary delay and cost, and to learn from that story and the lessons of Crossrail.

Once upon a time when this project was first floated, the governance model in this Bill was advocated and supported because it was going to follow the magnificent models of UK construction projects where we had at last cracked the problem and, as seen with the Olympics and Crossrail, we could now deliver on time and on budget. We still say that, except we leave out the phrase “and Crossrail”; we only say, “the magnificent example of the Olympics”. What Crossrail illustrated is that once you have a delay you automatically and unavoidably have cost increases. That is not only because it costs money to take longer; it costs even more money to try to catch up.

My amendment is designed to save the large amounts of public money which come from delay in taking decisions about how the project should proceed. A project of £4 billion intended to take eight years is going to spend, on average, £500 million each year. That is not a trivial sum in anybody’s counting and certainly not in the Treasury’s counting. The year’s delay will not cost you all the £500 million but it will probably, à la Crossrail, cost you two-thirds—£300 million, say, will be the cost of holding things back for a year, for one reason or another. So the current way we are going to decide whether we can afford something goes something like this: the sponsor body develops a programme, signs it off and passes it to the delivery authority, which gets the design work and the tendering going and then reports back to the delivery authority, which reports back to the sponsor body, which sends it to the estimates commission, which at that point consults the Treasury. The Bill says it “must have regard to” the information or advice it gets from the Treasury. In fact, three of the Bill’s 15 clauses relate to having to have regard to the Treasury’s advice.

Whatever might be said in some idyllic constitutional theory about parliamentary supremacy, the actual tap is turned on and off by the Treasury. That is no surprise and certainly it is the reality of this piece of legislation. The point is that at least a year, and probably 18 months to two years, after the sponsor body has commissioned the work to be done, the Treasury will say, “Oh, no, sorry, that is not in scope, we cannot afford that. Spread it over 10 years, drop all the stuff about getting into the turrets, never mind Lord Stunell and hearing, let us just have it like it was in the old building and cut costs”. We will still have the delays. Incidentally, it will be very difficult to save as much by cutting things out of the design as it will cost to have the delays—which, of course, is another Crossrail story as well.

What we have is a system where we know it will be the Treasury taking the decision on whether the money is going to be spent, but instead of asking before we start, “Can we have the money to do this?”, we are going to wait until we have done everything and then the Treasury is going to say no. Amendment 23 simply short-circuits that in a very simple way. It says that it is permissible to have a Minister of the Crown on the sponsor body. It does not require that there shall be, and it is therefore still a matter of choice as to whether such a person is appointed or not. What that means is that, at the start of the process and not at the end, the Treasury would be saying what can and cannot be spent. In terms of parliamentary accountability and lots of other things, people will say, “That is completely wrong”, but the Government’s fingerprints are going to be on this and they are going to do their best to wipe their fingerprints off it, which they will be well able to do if they present it in anonymous advice to the estimates commission two years after the process began and the delays will be there.

My amendment allows the Government to find a way of being more transparent about taking the inevitable decisions that the Treasury will make and putting those in the public domain at the earliest moment. I know that I do not have too many friends on this, but I have given the House an option, which it does not need to exercise but which in five, 10 or 15 years’ time, a future Administration and the future House will be very grateful for, so that they can indeed save any more delays than those that will by then already have accumulated. I beg to move.

[Baroness Smith of Basildon]

My Lords, I listened carefully to the noble Lord, Lord Stunell. If I understand his argument correctly, he seems to be expressing a lack of confidence that Her Majesty’s Treasury will come up with the money and deliver on the funding at the end of the project, and to avoid that he is suggesting putting it on the committee that is deciding what the project should do and what money should be requested.

I understand why the noble Lord made his arguments, and, as I said, I listened carefully, but I am not persuaded by them. This is a parliamentary project, not a government project—that is an important distinction to make. There are times when I suspect that there may be battles between Parliament and government on this, although I hope not. I hope that in bringing forward the Bill, government is showing its intention to recognise that the work has to be done and paid for.